Gsh Buys Newmarket North Mall

July 07, 1989|By NEIL CORNISH Staff Writer

HAMPTON — Goodman Segar Hogan announced Thursday that it purchased Newmarket North Mall for $34 million and plans to spend $10 million renovating it.

The announcement, which came at a press conference held in the Mercury Boulevard mall, ends yearlong negotiations with the San Diego-based Hahn Co., the mall's developers, and its partner, American General Insurance of Houston.

A public pension fund is a limited partner with GSH, a commercial real estate brokerage, management and development company. The name of the fund, which is acting through Hart Advisors Inc. of Hartford, Conn., was not disclosed.

Robert Stanton, GSH's president and chief executive, said the company plans a two-year, $10 million marketing, renovation and expansion project.

The renovation will include "state-of-the-art" design changes in the interior and exterior of the mall, which opened in 1975. More food outlets are expected, and a food court is being considred.

Newmarket North is a 800,000 square-foot enclosed regional mall located on 52 acres off of Mercury Boulevard. It is smaller than 1.1 million square-foot-Coliseum Mall, also on Mercury, and larger than 600,000 square-foot-Patrick Henry Mall in Newport News.

Stanton said the company plans to "take advantage of the mall's unique design" to make it the pre-eminant shopping center on the Peninsula. Newmarket is the only Peninsula mall with two floors. which the company plans to exploit by advertising that shoppers can walk less to reach more stores there, he said.

New merchandise could include additional, and more upscale, clothing and shoe stores. Redistribution of current tenants between the mall's two floors will be discussed.

Stanton said the renovation will likely start sometime after Christmas.

"Our goal is to be the dominant force" in the area, said Jay Lafler, senior vice president and director of property management and mall leasing.

Goodman Segar Hogan has done some studies into whether a fourth anchor tenant could be added to the mall, Stanton said. Leggett's, Miller and Rhoads and Sears now serve as the mall's anchors. The Miller and Rhoads and Sears buildings were not included in the sale; each store owns its building.

Stanton said he was not worried about what effect speculation concerning Miller and Rhoads' future would have on Newmarket North. Miller and Rhoads has said that due to financial problems the company may have to sell or close two stores, though Stanton said the Newmarket store is not one of them.

"Any time a tenant is written about in the media as Miller and Rhoads has in the past month, it would give a landlord some concern," Stanton said, adding that he would be meeting with Miller and Rhoads' chairman and vice chairman Friday. "They want to make this into one of their better stores."

With 92 tenants, Newmarket North mall's occupancy rate is 85 percent. Lafler said part of that was planned vacancies, because the former owners considered installing a food court.

The purchase was under contract for about eight months before becoming final, said Stanton. "Deals of this magnitude are very complicated," he said.

The Newmarket North deal is the largest financial acquisition to date for the company. The deal marks "the first of many institutional-grade properties we plan to purchase," Stanton said.